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Cost of 100 hourly's

Old 16th Feb 2014, 01:29
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Cost of 100 hourly's

I've done some research on the cost of 100 hourlys for our Seneca. Fixed price 100 hourly / annuals seems to be taking hold in the US. On the web I've found 10 shops in the US and one in Europe offering fixed price annual / 100 hourly's.

The prices range from $2,500 to $3,000 (converted to Aussie Dollars) + oil & filters. The most common would be about $2,800 based on 32 hours and about $85/hour (rounded figures). This is based on the Piper inspection schedule. The good old Aussie CASA Schedule 5 should have a couple of less labour hours.

The European one was to the UK CAA schedule which is regarded as more arduous that either CASA schedule 5 or the Piper Schedule and was still under $3,000 Aussie.

This is a bit more than half an accepted Australian price for a standard Seneca 100 hourly (with no additional parts, no heater inspections, prop, governor or mag inspections, etc).

Why are we so expensive?

I'm sure outrageous hangar rent at airports like Moorabbin is part of the answer, but it doesn't explain it all. What are the other factors?
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Old 16th Feb 2014, 02:31
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This fixed cost, for the service and insp only I take it, would not include any rectifications necessary as a result of the inspection? On a new build aircraft fixed price servicing could be possible, just as it is now common place for the first 5 yrs on a new car purchase. I doubt that any responsible Maintenance provider would promise a fixed price on a 30+ year old airframe! at least not without knowing the aircraft intimately.
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Old 16th Feb 2014, 03:07
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Old Akro - When you can find any spanner-wielder in Australia who only charges $85 hr - let me know where he is. He'll be suddenly overwhelmed with work - unless, of course, he produces a toolbox full of nothing but hammers and chisels.

Car dealerships are charging $100 hr minimum, and large numbers of repairers charge $120 hr.
With LAME's getting paid around AU$70 hr and AME's getting AU$60 hr, then the hourly rate needed for aircraft repair work would have to be around AU$140 hr, to cover all the business and employee expenses.
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Old 16th Feb 2014, 03:35
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One track- I'll think you'll find your Lame pay rates are a little excessive. GA lames with basic tickets, as would be needed to certify something like a Seneca, command approx half of what you claim. At least they do in places like Moorabbin. Most shop rates around Melbourne are between $85-$100ph. Avionics shops are more expensive but they are just so much more intelligent!
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Old 16th Feb 2014, 05:52
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For a start, the fixed price annuals are actually fixed price inspections - they don't actually cover the cost of fixing/rectifying any problems that the inspections show up.

Here in Oz, I suspect most owners simply hand the keys over to the LAME at annual time and say - "fix it".

I think a lot more owners in the USA are more "hands-on" in respect of having a say in what gets done at the annual, especially with the advent of companies (like one beginning with "Sav...") that specialize in helping owners manage the maintenance of aircraft. Could also be that the FAA system of regs does help as well but that's a whole different thread...

Anyway, over there, after the inspection is done, the owner gets a phone call or written quote for the rectification work that needs done and he then says yea or nay to each item, with or without assistance of said organisation...

So really, while the fixed price inspection does sound cheaper, in reality I'd say most of the time folk would pay more than the advertised price, unless of course you took your plane away from the shop and got someone else to fix it (which under the FAA regs you are apparently allowed to do...)

Factor in the tyranny of distance to get a part from Wichita, KS to Perth, WA and you see why it's all so much more expensive...
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Old 16th Feb 2014, 06:36
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where in OZ are AME's getting $60 an hour? most i know are struggling to get over $35
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Old 16th Feb 2014, 07:07
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What the AME is paid and what is charged to the customer are two different things (just like pilots!).
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Old 16th Feb 2014, 07:46
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Cost of 100 hourly's

No doubt about the going rate for a LAME - it's $85 - $90 per hour as the charge out rate. In round figures, an employer needs to add 35-40% on to his LAME's pay rate to cover the payroll adders, then more to get recovery to pay for his hangar, specialist tools, vehicle etc.
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Old 16th Feb 2014, 07:57
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Well, I guess Sigma Aerospace was absolutely bowled over by applicants in this case, then ....

Sigma Aerospace is a leading aerospace Maintenance and Repair Organisation (MRO) based in Tamworth, New South Wales. Sigma's clients include QANTASLINK, Jetstar, Cobham, National Jet Systems, QANTAS Defence, Air Niugini and Air Nelson.
Due to significant growth, Sigma Aerospace has exciting, long term contract opportunities for Avionic Licensed Aircraft Maintenance Engineers (LAME's) in Canberra whilst also inviting expressions of interest from Mechanical and Avionic LAME's for future positions in Canberra and Brisbane.

.... For your hard work you will enjoy a competitive hourly rate with Avionics LAMEs $68.50 and Mechanical LAME's $59.00 plus great opportunities for professional development. Enjoy mixed shift work including days, afternoons and night shifts.
SCOUT - Aircraft Maintenance Engineers (LAME)

Good equipment fitters and wrenchmen here on the left coast can command top-class money virtually anywhere. I would have thought LAME's and AME's would have been on similar income.
I was paying a top-class diesel mechanic $150,000 p.a. as my workshop leading hand, in 1994 - and he could have got similar money elsewhere.
Today, those same people can command $250K p.a. in the heavy equipment industry - and any of them with a little nous have their own contract repair business.
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Old 16th Feb 2014, 08:02
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The problem is not of the spanner time. It is all the non productive paper time.

Having said that there is also a lot of pencil whipped annuals and owners or subsequent owners discover later why the earlier annuals were less expensive.

I think all going well and no defects you can do one for that. So long as your sneaker is in good nick.
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Old 16th Feb 2014, 08:07
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Once again one track you are mistaking a GA lame for one with tickets on dash8/ATR. A group 1/5 LAME's licence doesn't mean much in an environment like that.
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Old 16th Feb 2014, 09:40
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I think you will all find that running any repair operation in Australia is more expensive than running one in the U.S.
Wages are generally lower overall in the U.S., as compared to Oz (do U.S. LAME's get substantial gratuities for an inspection done well? ) - and business costs in general in Oz would be higher, because the U.S. Govt is more favourably inclined towards businesses.

An employer in Oz has 9% superannuation to pay, workers compensation costs are horrendous, and penalty and holiday rates are higher than in the U.S. (and I'm not begrudging what employees get - wrenchmen earn it, AFAIC).

Saratogapp's estimate of employee costs is exceptionally conservative - it's actually more like 100% of an employees wage. So, for a wrenchman on $35 an hr, the employers total cost is more like $70 an hr for that man.
Then business costs such as workshop operating costs (rent, power, water, miscellaneous taxes and charges) have to be added to that $70 hr.
Then a profit margin, usually aimed at around 12.5%, has to be added to that total.
Thus, the reason why $100 an hr is usually a minimum charge, for anyone who's lifting a spanner in a workshop.
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Old 16th Feb 2014, 10:18
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Because you don't have mechanics or chuck in his pickup doing work down there he is not "authorised". You have approved facilities, engineers engine airframe, avionics radio etc, lots of systems and paperwork ( do you wipe your bum before or after the toilet better check the procedure and fill in the forms ) blah blah blah. It has been over complicated by your regulator and the result is no better and a lot more expensive.

How to make it complicated and hard do it in Australia.
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Old 16th Feb 2014, 11:09
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Old 16th Feb 2014, 11:09
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The b&llsh#t paperwork charges my LAME has to do was half the cost/hours of my last 50 hourly... Not grudging my lame, but the paper jockeys in YSCB that require it...
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Old 16th Feb 2014, 20:26
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I am glad i brought that up

And as pointed out before, for any business to be viable in terms of actually being a healthy business, you need to take the direct cost of the hourly rate and x 2.2-2.4 depending on the scale and industry type of the operation.

That becomes your TRUE cost, before you add any profit margin. So even at $100/hr + GST the LAME shop is not rolling in it.

Apply this to electrical contractors where the sparkies are charged out for virtually all the working hours a day, and you get $85-95, but in an industry where the staff are often required to do a lot of research, education or other necessary but not necessarily direct customer work, then you can see why it is not hard to get $150+GST. I charge my engineers out at that. If it is a 2-3 hour job on site the rate is $175, because of all the odd jobs surround that that they have to do.

Makes the LAME costs not so bad.

I saw an article in the USA recently and their rates were not much different to ours and in some states of the USA they were the same. In some states it could be the A&P's are all work from their truck guys and have lower costs, so apples and oranges comes to mind.

Have a good week y'all
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Old 16th Feb 2014, 21:25
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I wouldn't have a problem paying a LAME $150 an hour............if they knew WTF they were doing, it's that learning curve thingo mentioned above that irritates me. I'm not going to pay an AME or LAME to learn on my plane.

I've had one very good experience with a particular avionics shop on the Gold Coast who was upfront with this very thing. The manager said he hadn't installed the gear and set up I wanted so he came up with a very good price that left something in it for him & me. There were issues that related to billable time down the track that we negotiated. I've also had some pretty average 'got you by the balls' stuff, this has far outweighed the good.

It's not the floor AME or LAME's fault particularly. There's something seriously wrong with this box ticking way of training apprentices. Non aviation trades are a joke as well. You need to park your arse under a tradies stewardship for a period of time regardless of the boxes ticked.
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Old 16th Feb 2014, 23:39
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I've been managing a nice Panther Navajo here in Florida for number of years. Its maint. mob charge the owner $65/hr, and often do small things for no charge. They know every rivet on the plane and will come out at any time if needed to get a flight out. Now that its back to being used in 135 ops ('charter') - which is where I first started flying it about 7 years ago - it & its log books have been subject to FAA scheduled & random inspections and always passed with a clean record.

I'm very happy with the maintenance!
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Old 17th Feb 2014, 00:33
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The problem with that 19 minute job is;
A. It has to go worn bolts, nuts, clsmps etc.
B. You need to add the time for you to find the LAME, discuss the problem, he clears the space, tows the plane, sources the battery, raises the paperwork, goods receipts it, does the change over, disposes of the packaging, takes the battery to the recycle place(done at a later date), clean up put tools away, push plane out and chin wag with you while you tell warries about the last battery.
C. Fills in the MR and raises your invoice.
D. Pays the credit card fees....or chases you for payment

Yep.....19 minute job.
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Old 17th Feb 2014, 01:20
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Then there's also the preparation of the new battery. Read up what you are supposed to do, and if you're fitting a new battery in 19 minutes you are not doing it properly.
You'd be the first one in for a whinge if there was some problem with the new battery, too! And you'd be jumping all over the place if you found that the ginger beer hadn't fitted your new battery properly!!! (Like, if he did it in 19 minutes)
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